Airport plans $25m retail centre

ALAN WOOD
Last updated 05:00 01/04/2013
Forgie
JOHN KIRK-ANDERSON/Fairfax NZ

EXPANDING BUSINESS: Airport chief commercial officer Blair Forgie at the Dakota Park development.

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Christchurch International Airport Ltd plans a start to $25 million retail development to be known as Spitfire Square in the fourth quarter of this year.

Located off Memorial Ave, the square will bring in yet another revenue stream to the majority council-owned airport company, which has faced significant criticism of its charges for car parking and courtesy van-taxi visits.

Prices charged by retailers on the airport campus, which are tenants of the airport company, have also been held up as too high by airline representative body Board of Airline Representatives (known as Barnz).

The airport now gains 64 per cent of its revenues from non-aeronautical streams or areas not directly linked to airline and passenger charges, its recent half-year result shows.

It wants to increase that non-aeronautical component even further.

The airport reported first-half non-aeronautical income grew 12.2 per cent to $38.8m - about 64 per cent of total first-half revenues of $59.6m.

In the June 2010 year non-aeronautical income formed about 54 per cent of total revenues, and in the June 2008 year only 40 per cent.

"We've had significant growth in the last three or four years," chief commercial officer Blair Forgie said. "Certainly our expectation is that the commercial revenues and the commercial side of our business will continue to grow into the future."

The precinct to be known as Spitfire Square will have 15 stores including bars, cafes, trading banks and an "anchor" supermarket, located off Memorial Ave, in a space between Peter Leeming and Orchard roads, when completed.

"We're very close to finalising an agreement with an anchor tenant for Spitfire Square," Forgie said.

The buildings, with a total floor plan of 5700 square metres, and other square infrastructure had a completion target of late next year, he said.

A Tourism Holdings Maui motorhome business, on airport land, will be demolished to help make way for Spitfire Square which will border on to the Sudima Christchurch Airport hotel site. The motorhome business will move to another site.

"The whole idea of this is to provide services and amenities to those people working on the campus so we'll have things like a post office, a bookstore, maybe a flower shop . . . there will be provision within the development for over 200 car parks," Forgie said.

Nearby the airport plans to offer a 200-bed backpacker hotel, to be located behind Spitfire Square, further up Peter Leeming Rd.

Soon after the damaging earthquakes of 2011 backpackers started using the airport lounges as a temporary home, and there were still some travellers staying in the terminal buildings, Forgie said.

Backpackers accommodation would alleviate this problem.

The airport has chosen a preferred partner as the operator of the accommodation but is still working through "due diligence" on that role.

The airport has been working closely with the "sole right" operators of the Sudima hotel to allow it to bring in backpacker operators onto the wider airport site.

The 208-room Sudima has its own refurbishment redevelopment plans, working to upgrade the hotel to a Qualmark four-star international hotel rating.

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Forgie said the airport's non-aeronautical revenues were split into three different components including income from retail space within the terminal, the airport's commercial property portfolio and other assets including car parking and the International Antarctic Centre.

Terminal revenues are increasing as the airport's $237m domestic terminal rebuild project moves towards completion in mid-April. Once passengers get through to a new passenger departure lounge there will be a Relay bookshop and an Iconz food treat and gift shop focusing on retail items with a Kiwi twist.

The airport had received positive feedback on the retail mix, particularly for food and beverage outlets, with a new Coffee Culture shop due to open, Forgie said.

The "South Bar & Cafe" was attracting Christchurch residents willing to travel to the airport for dinner. Near the South Bar, the airport had earmarked 450 square metres of extended retail space for technology, jewellery and apparel stores, plus 300sqm of extra office space for airport tenants.

Down on the ground floor new offerings will soon include a convenience store at the airport's ground-floor regional lounge for turboprop-based flights.

Barnz executive director John Beckett said the airline representative group was concerned that some airport charges in New Zealand, including retail and car parks were higher than they should be and hitting airline passengers.

Barnz had no concern about the airport's drive to increase non-aeronautical revenues from areas such as property parks.

"Some of their commercial activities that are not related to airline passengers we see as very much their business, their matter and we're confident that it is kept separate in the books from the aeronautical business.

"However, there are some businesses that relate to the passengers such as the car parking, charging for taxis, charging the shuttle buses that drop people off, the retail shopping, which are making money out of the passengers."

Car parking is a touchy subject for Christchurch residents, given strict policing of a drop-off and pickup zone.

Russley, Avonhead & Memorial Residents' Association spokesman Geoff Judge said car parking costs were "horrendous".

As a result airline passengers were regularly choosing to park along Memorial Ave, with the gutters full of rubbish left by those airport users.

The airport should "stick to their knitting" in terms of providing a transport hub, Judge said.

"Of course the council's looking for all the revenue it can get, and one of the things is the parking."

More recently the airport had attracted the ire of motel and hotel owners who were "livid" at new airport charges that now means they have to pay $10 a visit to pick up guests in courtesy vans.

But Forgie said as far as general car parking at the airport, there had been no increase in charges since July 2011.

"We've got no plans for any increases in the near future."

He acknowledged there was a perception held by the public that car parking was expensive. To counter that a marketing campaign was planned.

AT A GLANCE

Christchurch Airport's plans include: The Dakota Park commercial property development. A car-parking business, Craddocks. A temporary office park with tenants including House of Travel. Plans to build Spitfire Square retail precinct for bars, cafes and a supermarket. Plans to build a 200-bed backpackers lodge.

- The Press

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